Question

What would be the journal entry for the transfer of accumulated profits?

Options

• Reserves A/c Dr To All Partners' Capital A/c's (Individually)

• All Partners' Capital A/c's (Individually) To Profit and Loss A/c

• All Partners' Capital A/c's (Individually) To Profit and Loss Adjustment A/c

• None of these

Answer 1

Reserves A/c Dr To All Partners' Capital A/c's (Individually)

Explanation:

For the purpose of transferring accrued profits (reserves) Reserves A/c Dr To All Partners' Capital A/c's (Individually) (In the prior profit sharing ratio, reserves were transferred to all partners' capital accounts).